La Cigarra comprises 32,064 hectares located 26 kilometres from the historic silver-mining city of Parral. Drilling at the Las Carolinas and San Gregorio Zones has defined a mineralized vein-system measuring 2.4 kilometres.

President/CEO Fred Hewett spoke to Kevin Michael Grace January 15.

RW: You must be pleased with the results.

FH: We’re ecstatic. We’re up to our 128th hole, and we have essentially a 100% success rate in our drilling. We’ve expanded the property position from 300 hectares when we started to 32,000 hectares now. We’ve gone from having the three projected zones we initially staked to having at least seven or eight potentially significant zones. And we’ve found what looks like a new parallel structure right beside the existing La Cigarra trend. So it’s been a remarkable three years.

RW: Is this shaping up to be an openpit development or underground?

FH: I have to be cautious because there is no 43-101 statement out, but I think it’s pretty fair to say anybody that looks at the numbers and does even gross calculations would be looking at between 50 million and 100 million ounces of material in potential openpit.

Besides that, we’re having enough success with the narrower high-grade intervals that I wouldn’t be surprised to see this thing continue to depth. And it’s entirely conceivable that someday it could turn into a higher-grade underground operation.

RW: So you’re working on an initial resource estimate now?

FH: We are. JDS Mining has been working on it for about six months. At one time, we thought we were going to put it out in 4Q 2012, but we delayed it because we could see that there were lots of wide-open areas. So we drilled another 22 holes in 4Q 2012. All that data has gone to JDS, and they will produce the initial resource towards the middle to end of 1Q 2013.

RW: What’s the cutoff point for the resource estimate?

FH: It will be Hole 139. We have another 11 holes to report.

RW: Assuming the initial resource estimate is as good as you hope, when can we expect a prefeasibility study?

FH: Game plan is that, in conjunction with the resource calculation, we’ll start what we’re calling, for want of a better term, a high-level review or internal scoping study. It will not be 43-101 calibre, but it will tell us whether we have a very good chance to have an economic deposit here. If that’s the case, we’ll immediately start an internal preliminary economic analysis that will turn into a 43-101. We can easily have that out early to mid second quarter of 2013.

RW: What are your drilling plans for this year?

FH: “Plans” has to be in quotation marks because we’ve got so many targets. It’s a geologist’s dream. But I have to be sensible because we can only drill within our budget. So we are not drilling in 1Q 2013 while we put all this stuff [resource estimate, scoping study] together. Depending on the market and its acceptance of our resource, we have plans (not yet approved by our board) for two core drills and one RC rig starting 2Q 2013. And subject to funding, that would be in the order of 40,000 metres for the remainder of the year.

“If I had told you in 2010 that we were going to have 128 reported holes and intersect potentially economic silver grade at decent widths in all of them, you would have said I was dreaming. But that’s what has happened”—Fred Hewett

RW: How much cash do you have? What is your burn rate?

FH: The cash position is not official because our CFO insists we put it out audited by quarter, but we’re in the order of $3.5 million at the end of 2012. Our burn rate is about $500,000 a month, so we’re obviously going to need to finance in the second quarter to do the aggressive work we want. We do have $4.5 million in warrants at $0.40 available right now, and if the resource estimate is as positive as we think it will be, I’m hoping we can get those warrants exercised.

RW: Your share price hit a trough in December but has improved significantly since then. To what would you attribute that?

FH: I’m a geologist, not a market guy, but it coincided with the tax-loss selling, the yearend malaise. There was no technical reason for it to drop off, and I think people are getting back to realizing what a good property we have. There are more buyers than sellers now.

RW: What is the security situation in Chihuahua State?

FH: Decent. Mexico has definitely changed in the last 10 years, and anybody who doesn’t recognize that is naïve. But we’re sensible. For example, we do not travel at night just to be extra safe. All the people who go into the field go in pairs. That said, we’ve had no incidents of any consequence. We’ve had no problems with any drugs in the area. Given that La Cigarra is so close to Parral, we drive back and forth every day, and so there is no camp in the field. It’s a pretty secure operation; we just have to continue to be sensible.

RW: Given your expectations when you started working on this property, how does the reality compare?

FH: That’s an interesting question because normally what happens is that geologists have this dream when they see a property. You always have this dream that you’re sitting on top of a significant deposit, and all we have to do is drill it. And 99.9% of the time that doesn’t turn out to be reality.

What’s happened here is that the property has far exceeded my expectations. If I had told you in 2010 that we were going to have 128 reported holes and intersect potentially economic silver grade at decent widths in all of them, you would have said I was dreaming. But that’s what has happened. So my expectations have been exceeded because we have had such tremendous success.

At press time, International Northair had 91.7 million shares trading at $0.34 for a market cap of $31.2 million.